CS 1 MC MB MASTER Blank

CS 1 MC MB MASTER Blank - CLASS SUPPLEMENT #1 (Page 1 of 2)...

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CLASS SUPPLEMENT #1 (Page 1 of 2) RATIONAL SELF-INTEREST AND MARGINAL ANALYSIS Retailer is considering staying open beyond 5 PM What are the optimum number of hours to remain open? TB TC MNB TNB Hour MB ( MB) MC ( MC) (MB-MC) ( MNB) MB: Marginal Benefit; the revenue received this hour only. TB: Total Benefit; the cumulative revenue received for all hours open ('MB) MC: Marginal Cost; the cost of operating this hour only. TC: Total Cost; the cumulative cost of operating for all hours open ('MC) MNB: Marginal Net Benefit (MB - MC); the gain (profit) this hour only. TNB: Total Net Benefit ('MNB); the cumulative gain (profit) for all hours open. What is the goal of this business? Optimum # of hours = Equilibrium is a "point of tendency." Where is it?
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CS #1 (Page 2 of 2) HERE IS A PROBLEM TO TEST YOUR UNDERSTANDING OF MARGINAL ANALYSIS AND THE CONCEPTS OF OPTIMUM AND EQUILIBRIUM. WORK THIS PROBLEM BEFORE LOOKING AT THE SOLUTION BELOW. Newlyweds, Ken and Barbie, are shopping for a new plasma TV set.
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This note was uploaded on 02/13/2012 for the course ECON 202 taught by Professor Brightwell during the Spring '08 term at Texas A&M.

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CS 1 MC MB MASTER Blank - CLASS SUPPLEMENT #1 (Page 1 of 2)...

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